In this episode of CIX Conversations, Rachel Koh, Origination Director at CIX, sits down with Fred, CEO of GenZero, one of CIX’s strategic shareholders and early backers, to explore why GenZero backed CIX early, what proved harder or easier than expected, and what the next five years could look like. The conversation traces the origins of CIX, the importance of trust, integrity and transparency in scaling voluntary environmental markets, and why climate action requires both urgency and patience.
Markets are rarely built in straight lines. They are shaped by early conviction, tested by uncertainty, and strengthened through the slow work of earning trust. As CIX reflects on its first five years, this episode looks at what it means to build market infrastructure in a space where the stakes are both commercial and climate-critical.
Backing CIX
Rachel: Fred, could you take us back to the moment when CIX was founded?
Fred: At the start, a few like-minded institutions came together to establish CIX. I was part of Temasek at the time, and we were very fortunate to be joined by partners like DBS Bank and Singapore Exchange to create a platform like CIX.
The genesis story of CIX began in the aftermath of COVID. It emerged out of the Emerging Stronger Taskforce, where we were exploring new areas of economic development and growth that could power Singapore’s economy in a post-pandemic world.
One of the key focus areas then was climate – specifically how to catalyse greater investment into climate solutions. An interesting idea that came out was the need to enable at scale an efficient, effective and credible carbon market. But the thesis behind carbon markets was never simply about generating credits to help corporates offset emissions. It was much more about creating an efficient mechanism to drive financing into deserving underlying solutions.
Rachel: When you back something early, you’re really backing a thesis about the future. What did you believe CIX could uniquely build, and why did that matter to you at that time?
Fred: At that point in time, one of the areas that we felt was chronically underfinanced was nature. We thought it was important to create the ecosystem and infrastructure to enable this. Out of that came an idea that maybe an exchange platform could play a critical role.
Why? There were three major barriers to scaling the carbon market at that point in time.
First, there was a lack of consensus around quality. What does a good carbon project look like? What makes for a credible carbon credit?
Second, there was a lack of price transparency. We didn’t know whether a carbon credit should be priced at $5, $10, $50, $20. In fact, when I first started my work in GenZero, I was offered the exact same carbon credit project at both $8 and $15. Nobody knew what was the right price. This lack of transparency also meant that the value generated from the sale of carbon credits was not always flowing back to the project developers or the local communities that were responsible for the project.
Third, the demand side was still relatively underdeveloped. There were only a few sophisticated buyers and traders that had already been operating for a long time.
To address these issues around demand- and supply-side integrity, and to be able to bring price transparency, we thought that an exchange platform like CIX made a lot of sense.
Why “Climate Impact X”
Rachel: That sounds like there was so much that had to be done back then. But what strikes me is that at the heart of it, CIX was really trying to do one thing – and that is to build trust and credibility in a market that was still defining itself.
Fred: Absolutely. Even when deciding CIX’s name, it was important that we chose ‘Climate Impact X’ and not ‘Carbon Impact X’. There are two reasons why:
One, we never really thought of CIX as just a marketplace for carbon credits – and certainly not purely for nature carbon credits. We always believed that it was important to create a strong, scalable environmental market so that we can trade environmental attributes. Carbon credits was the way that we started, but it’s certainly not the be-all, end-all for what CIX represents.
Two, why climate impact? Because at the end of the day, we are not doing this just because we are interested in financial instruments or products or markets. We are ultimately interested in creating impact that will benefit the climate and the environment.
The biggest early risk
Rachel: Listening to this vision that you and the early backers of CIX had, I’m curious to know whether this was something you could see back then that perhaps the rest of the market had not quite clearly seen, or whether it was simply a case of the gap being too big to ignore.
So maybe let’s flip that for a little bit. Looking back to when you made that early commitment, what was one of the biggest risks you identified, and what gave you confidence that it was a risk worth taking?
Fred: An exchange, as a business, requires scale and liquidity. That was always the biggest risk, and it remains one of the biggest risks today. If there is no momentum, no market activity, no liquidity and no scale, then the business model becomes extremely challenging. So that was the one thing we really needed to believe in – that eventually, the market activity would come.
We are very fortunate that the strategic backers behind CIX, which now also include Standard Chartered and Mizuho Bank, take a long-term view on this mission. We have a long-term strategic perspective on what is needed to drive financing into carbon or climate solutions. That means being patient about what it takes to scale and build liquidity, while at the same time taking active measures to create the right conditions for success.
One of the early things that CIX embarked on was a relentless focus on integrity. That meant setting up an International Advisory Council comprising experts from different backgrounds to engage deeply on issues related to supply- and demand-side integrity. Alongside that, CIX has also been championing transparency – making sure that information associated with carbon credit projects is transparently displayed and made available so that buyers and sellers alike can make informed decisions. A market simply cannot function effectively with asymmetric or imperfect information – so that is the one thing that I think we prioritised correcting.
“A market cannot function effectively with asymmetric or imperfect information.”
Why transparency takes an ecosystem
Rachel: I like what you say about transparency, because transparency is great in theory. But it’s important to recognise that it only works if we all agree on what we are looking at and what really matters. If everyone is looking at completely different things, it becomes very difficult to scale a market. For some buyers, transparency might mean the access to information; for others, it might be about how risks are communicated. Unless there is greater alignment on what defines transparency, it will be very difficult to move forward.
Fred: That’s absolutely right. And it’s important to recognise that CIX’s success will not depend on CIX’s efforts alone. It really takes a village, and in this case, a global ecosystem.
If we look at the past few years, the industry has made important steps to improve effectiveness, integrity and credibility across different dimensions. On the supply side, we’ve gone through a series of episodes that forced us to think much more fundamentally about quality. Today, we have meta-standards like the ICVCM, and to some extent CORSIA eligibility, acting as integrity markers for methodologies through tools like the CCP label for example.
At the project level, we now have a much more mature carbon ratings industry. Companies such as BeZero, Sylvera, Calyx and others are able to properly evaluate the quality of individual projects and their ability to faithfully execute the methodology. This gives a much broader range of buyers and market participants confidence in their ability to assess, evaluate and conduct due diligence on projects – and that can only be a good thing. These improvements are also enabled by technological changes. MRV capabilities today are far more accurate and cost-effective than before. So we have a better sense of how to assure supply-side integrity.
On the demand side, we are starting to coalesce our views around what kind of claims we can make and how carbon credits can be used. At the same time, more countries are imposing carbon taxes, carbon pricing mechanisms or ETS programmes – and that makes the demand for carbon credits a lot more real, right? Overall, as an infrastructure, we are seeing a lot more investors who are now at least familiar with investing into carbon projects.
Rachel: If I could tie this back to the question on risk, it sounds like the risk is not so much whether what we are doing is right, but whether everyone in the market understands and agrees that what we are doing is right.
The invisible work of building a market
Rachel: This leads me to the next question on your experience. As you’ve observed CIX’s evolution over the last five years, together with how the market has evolved, was there a moment that made you think, “Hey, this is the real work that people don’t usually see,” and which sharpened your understanding of what it takes to build market infrastructure?
Fred: The way to scale a platform like CIX lies in its ability to build confidence across a much broader community. One of the toughest things CIX had to do initially was to create that community itself – reaching out to stakeholders across the entire value chain. I remember all the workshops, and now these podcasts, and many of the thought leadership papers that the team has done to build awareness and capacity in support of CIX’s broader mission.
In terms of overcoming some of these risks and challenges, one of the things I value very much is the ability of the CIX team to stay agile, nimble and adapt quickly. If we remain stuck on the idea that there is only one model – an exchange platform model built on deep liquidity and scale – then it becomes very difficult to figure out how we actually get from point A to point B.
If you look at the different products, services and platforms that CIX has built over the years – whether it’s an auction platform, market intelligence, corporate sourcing capabilities, or the infrastructure backbone that enables efficient transactions, custody and settlement – they all reflect the reality that, as a young platform in a very nascent industry, the ability to adapt, pivot and constantly refine the product-market fit is highly critical.
Rachel: That’s great. I’m hearing what you’re saying about the visible progress we’ve made – the product development, the events and activities that have led us to this point.
But what I’m also hearing is that one of the biggest lessons from the last five years has been the importance of staying agile and maintaining coherence in a market that’s constantly shifting and still trying to find its footing.
What the next phase demands
Rachel: Let’s turn specifically to the future. What must be true in terms of capabilities and collective behaviours for CIX to succeed in its next phase?
Fred: I think there are three or four things. First, there must remain a clear, incessant focus on quality, because the quality of the products you bring to market is ultimately what maintains trust and credibility with buyers.
Second, there is a need to constantly innovate. If we think about some of the firsts CIX has introduced – whether it is your CORSIA standardised product, or the auctions the team has run – many of these initiatives were breaking new ground. We need to keep thinking about how CIX can better serve its stakeholders and customers. That ability to innovate, and be daring and dynamic will be quite important.
Third, we need to have a clear focus on our people, because this is ultimately a people business. We can talk about technical infrastructure and all the systems we have built, but CIX is a living organisation because of the quality and the dedication of its people. I think it’s important to pay tribute to your founding CEO, Mikkel Larsen, who sadly passed away just over a year ago. One of the things we remember Mikkel for was his absolute dedication and passion for CIX’s mission. He was deeply driven by the desire to protect the planet, his love for nature, and his dedication to his people and his team.
When you are building a new platform in a dynamic, volatile environment, the people matter. CIX must continue to bring in young, dynamic, passionate, mission-aligned individuals, so we continue to foster the right values even as we try to be commercially pragmatic in this world.
Rachel: Mikkel has this great ability to bring people together, not just within CIX, but across the wider ecosystem. Because even if you gather the best musicians in the room, if everyone is playing a different tune, a different tempo, it simply won’t work. That shared passion is really what binds everyone together so we can come up with a cohesive piece.
Making room for more climate solutions
Fred: Another element for success is to be open-minded. As we expand into areas like RECs, engineered CDRs and other project types, we are trying to build a theory of change to efficiently allocate capital towards the most deserving underlying solutions that can drive proper decarbonisation and help us achieve net zero.
Clearly, we are facing very uncertain times, and there are a lot of headwinds in our industry. But the challenge of climate change has not gone away. In fact, to some extent, the need for removals and high-quality carbon products is growing. We are heading towards a far more climate-impacted world come 2050 – and it is increasingly unlikely we can hold on to a two-degree world, much less 1.5-degrees.
In that kind of a climate-impacted future, we need to be able to drive financing much more urgently into underlying solutions that matter – including those that may still carry a green premium or do not yet have a solid commercial case. Channelling capital into nature remains one of the most cost-effective ways to protect the planet and guard against climate change.
Similarly, driving finance towards emerging solutions like sustainable aviation fuel, carbon capture or low-carbon materials will be equally fundamental in expanding the range of solutions available for industries to decarbonise meaningfully.
Moving beyond binary thinking
Rachel: You touch on a very sobering reality of where we are in this roadmap towards climate change mitigation. One major distraction is the idea that we still have a choice.
So when you talk about directing capital to the right places – whether it’s supporting people, investing in the technology or financing nature-based solutions – the reality is that we need to use every tool available to us. We can no longer afford to cherry-pick and say, “We’re not quite ready for the market yet.”
Fred: Absolutely. Which is why the theme for this year’s GenZero Climate Summit is “Beyond Binaries”.
Oftentimes, we frame the world in black and white terms – tech versus nature, avoidance versus removals, mitigation versus adaptation. We debate which solution is better, when in reality, we need everything. Addressing climate change requires a full-court press and a much more open-minded approach. Sometimes, we also suffer from what I would call “narcissism of minor differences” – quibbling over small things that ultimately distract us from the bigger picture – and we end up missing the forest for the trees.
What really matters is whether we can align around a common set of principles: we want projects and carbon credits that deliver real climate impact; we want robust verification and quality assurance; and we want clarity on claims we can make. These are shared priorities regardless of whether you support tech- or nature-based solutions, removals or avoidance.
So I think that we need to move away from very superficial categorisations of solutions, and adopt a more open-minded and pragmatic approach. If it delivers real climate impact, if it delivers meaningful decarbonisation pathways, then we should be willing to support it.
A bias for action
Rachel: I’m really glad to be having this conversation with you today, Fred. If there is one thing you would want our listeners to take away, what would it be?
Fred: At this point in time, the critical thing that we need to embrace is a bias for action. There is no time for us to pause. There is no time for us to wait. Even as the world grapples with macroeconomic pressures, climate change is still happening all around us.
And its impact will become much more real in a few decades. If we were to wait until the problem becomes impossible to ignore, the cost of fixing it will be exponentially higher. And the sad thing is that the cost will not primarily be borne by us, but by our children.
So the question we ask ourselves is : What kind of a legacy do we want to leave for them?
This is why having a bias for action and a genuine sense of urgency is critical.
“The critical thing that we should believe in, adopt and embrace is a bias for action. There is no time for us to pause. There is no time for us to wait.”
Disclaimer
This podcast is produced by Climate Impact X Pte. Ltd. (“CIX”) and is intended solely for general information. The views, opinions, and recommendations expressed by the host and guests are their personal views and do not necessarily represent the views of CIX, its management, or its affiliates.
The content in this podcast does not constitute legal, financial, investment, or professional advice and should not be relied upon for any decision making. Listeners should seek independent professional advice tailored to their specific circumstances.
While efforts are made to ensure information is accurate as of the recording date, CIX makes no representations or warranties regarding the completeness, accuracy, or reliability of the information discussed.
CIX shall not be liable for any loss or damage arising from reliance on the content of this podcast. By listening to this podcast, you agree that you do so at your own discretion and risk.
